* PEPR tells shareholder to reject offer
* ProLogis share down 1.7 percent
* PEPR shares close down 0.47 pct (Rewrites throughout, adds stock price, background, tender extension, previously AMSTERDAM)
By Ilaina Jonas
NEW YORK, May 3 (Reuters) - The management of ProLogis European Properties FCP (PEPR), owner of high-quality European warehouse and distribution centers, on Tuesday said the tender offer price from its one-time parent, ProLogis (PLD.N), is too low.
"We believe that the offer does not reflect the full value potential of PEPR," Peter Cassells, PEPR PEPR.AS chief executive, said in a statement.
Last month, Denver-based ProLogis raised its stake in PEPR to 38 percent from 33 percent, which triggered a mandatory tender offer for the shares it did not own. ProLogis has offered 6.10 euros for the common and preferred shares it does not own. As of April 28 its stake was up to 39 percent of common shares. On Tuesday, ProLogis extended its offer to May 11 from the previous expiration date of May 6..
Based on 190.5 million shares, ProLogis's offer values the company at 1.16 billion euro ($1.72 billion).
"Neither the independent members of the PEPR board, nor the managers of the management company intend to accept the offer in respect of their own holdings of units," PEPR said in its release.
ProLogis has said that its offering price represents a 22 percent premium to PEPR's share price of April 12.
ProLogis was prompted to raise its stake last month after Dutch pension manager Algemene Pension Groep NV and Australian warehouse and distribution center owner Goodman Group GMG.AXi offered 6 euros per share.
ProLogis spun off PEPR in an initial public offering in 2006 and has two seats on its six-member board. It also manages PEPR and receives fees for doing so. PEPR owns some of the highest quality warehouse and distribution centers in France, Britain, Italy, Spain and Central Europe, according to research firm Green Street Advisors.
Last week hedge fund Fir Tree Partners, which has a 4.3 percent stake in Luxembourg-based PEPR, urged ProLogis to raise its offer, saying it represented a price that was below the value of the properties.
New York-based Fir Tree also said that the properties are expected to increase in value given that demand for warehouse and distribution centers are tied to global trade, which has rebounded.
ProLogis is set to merge with U.S. rival AMB Property Corp AMB.N. Stockholders are scheduled to vote on the deal June 3.
Shares of ProLogis were off 32 cents at $15.97 in afternoon trade on the New York Stock Exchange. PEPR shares closed at 6.12 euros, down 0.03 euro on the Euronext Amsterdam Exchange.
(1 euro=$1.48) (Editing by Steve Orlofsky)